Tech Trends 2014 Inspiring Disruption Contents Introduction | 2 Disruptors CIO as venture capitalist | 6 Cognitive analytics | 18 Industrialized crowdsourcing | 30 Digital engagement | 42 Wearables | 54 Enablers Technical debt reversal | 66 Social activation | 78 Cloud orchestration | 88 In-memory revolution | 100 Real-time DevOps | 112 Exponentials | 124 Appendix | 136 Tech Trends 2014: Inspiring Disruption Introduction ELCOME to Deloitte’s fifth annual Technology Trends report. Each year, we study the ever- Wevolving technology landscape, focusing on disruptive trends that are transforming business, government, and society. Once again, we’ve selected 10 topics that have the opportunity to impact organizations across industries, geographies, and sizes over the next 18 to 24 months. The theme of this year’s report is Inspiring Disruption. In it, we discuss 10 trends that exemplify the unprecedented potential for emerging technologies to reshape how work gets done, how businesses grow, and how markets and industries evolve. These disruptive technologies challenge CIOs to anticipate their potential organizational impacts. And while today’s demands are by no means trivial, the trends we describe offer CIOs the opportunity to shape tomorrow—to inspire others, to create value, and to transform “business as usual.” The list of trends is developed using an ongoing process of primary and secondary research that involves: • Feedback from client executives on current and future priorities • Perspectives from industry and academic luminaries • Research by alliance partners, industry analysts, and competitor positioning • Crowdsourced ideas and examples from our global network of practitioners As in prior years, we’ve organized the trends into two categories. Disruptors are areas that can create sustainable positive disruption in IT capabilities, business operations, and sometimes even business models. Enablers are technologies in which many CIOs have already invested time and effort, but that warrant another look because of new developments, new capabilities, or new potential use cases. Each trend is presented with multiple examples of adoption to show the trend at work. This year, we’ve added a longer-form Lesson from the front lines to each chapter to offer a more detailed look at an early use case. Also, each chapter includes a personal point of view in the My take section. Information technology continues to be dominated by five forces: analytics, mobile, social, cloud, and cyber. Their continuing impact is highlighted in chapters dedicated to wearables, cloud orchestration, social activation, and cognitive analytics. Cyber is a recurring thread throughout the report: more important than ever, but embedded into thinking about how to be secure, vigilant, and resilient in approaching disruptive technologies. 2 Introduction For the first time, we’ve added a section dedicated to what our contributing authors at Singularity University refer to as “exponential” technologies. We highlight five innovative technologies that may take longer than our standard 24-month time horizon for businesses to harness them—but whose eventual impact may be profound. Examples include artificial intelligence, robotics, and additive manufacturing (3-D printing). The research, experimentation, and invention behind these “exponentials” are the building blocks for many of our technology trends. Our goal is to provide a high-level introduction to each exponential—a snapshot of what it is, where it comes from, and where it’s going. Each of the 2014 trends is relevant today. Each has significant momentum and potential to make a business impact. And each warrants timely consideration—even if the strategy is to wait and see. But whatever you do, don’t be caught unaware—or unprepared. Use these forces to inspire, to transform. And to disrupt. We welcome your comments, questions, and feedback. And a sincere “thank you” to the many executives and organizations that have helped provide input for Tech Trends 2014; your time and insights were invaluable. We look forward to your continued innovation, impact, and inspiration. Bill Briggs Chief Technology Officer Deloitte Consulting LLP [email protected] Twitter: @wdbthree 3 Tech Trends 2014: Inspiring Disruption 4 Disruptors CIO as venture capitalist CIO as venture capitalist Trading on IT’s assets, talent, risk, and results CIOs who want to help drive business growth and innovation will likely need to develop a new mindset and new capabilities. Like venture capitalists, CIOs should actively manage their IT portfolio in a way that drives enterprise value and evaluate portfolio performance in terms that business leaders understand— value, risk, and time horizon to reward. CIOs who can combine this with agility and align the desired talent can reshape how they run the business of IT. IOS have historically focused on core Thinking like a VC delivery and operations with a budget and C Effective VCs are often shrewd operating model built around low risk—buying businesspeople who operate across a enterprise-class software, building a talent base range of intertwined capabilities. They that could support a well-defined future state, manage portfolios of investments, driving for efficiencies in light of constant continually evaluating individual and cost pressures. More and more CIOs, faced aggregate performance in terms of value, with disruptive forces such as crowdsourcing,1 risk, and reward. They deliberately attract mobile only,2 big data,3 and cybersecurity,4 are entrepreneurial talent with technical skills shifting from a world of known problems into and business savvy—as well as vision, passion, one filled with unknowns. To make matters and the intangible spark of leadership. And worse, organizational governance has become they cultivate agile organizations to anticipate more complex as barriers for other parts and respond to changing market conditions— of the business to enter the technical arena open to decisions to exit, take public, reinvest, have fallen. or divest. These capabilities are closely CIOs are seeing this divergent behavior— related to the CIO’s leadership role in today’s and realizing that their current tools for growth-oriented organization. managing risk and leveraging assets may Portfolio investment strategy. CIOs today not work in this new world. Instead, many juggle an ever-growing portfolio of projects, are beginning to manage their technology ranging from long-term strategic initiatives portfolios in ways that drive enterprise value, to keeping the lights on. CIOs need clear lines actively monitor the performance of the of sight across their portfolio of programs portfolios, and communicate the portfolios’ and projects—the objectives, dependencies, positions in language the business can grasp. status, finances, associated resources, and risk To do this, CIOs are borrowing from the profiles. But in-flight initiatives are only one playbook of today’s leading venture capitalists piece of their balance sheet. CIOs should also (VCs). As a result, they are reshaping how they understand their assets—hardware, software, run the business of IT.5 facilities, delivery model (the way work gets 7 Tech Trends 2014: Inspiring Disruption Capabilities map for CIOs done), contracts, vendors, and people. The portfolio of IT is a complex one. But that 1 Portfolio management complexity is no excuse for flying blind. Valuation. An effective portfolio view As IT budgets continue to increase, it is more important to manage them closely. In 2013, 38% of organizations created enables the CIO to continually evaluate the a portfolio approach to IT.2 strategic performance of each asset, project, and vendor in terms that business leaders Increase Maintain Decrease understand. A CIO with a VC mindset doesn’t just report on the organization’s to-do list or inventory of assets; the CIO communicates the quantitative and qualitative value the IT organization contributes to the business. This 3 means delineating the strategic importance Talent alignment of programs, projects, and assets. What IT needs the right skillset to maintain systems and innovate. initiatives are mission-critical for the business? Business skill gaps within IT Technical skill gaps What is the confidence level around on-time, on-budget delivery? How deliberately are business case results tracked? Which hardware and software assets are identified for growth? ­ For sunsetting? For active retirement? How “heavy” a balance sheet do you want to carry? Handicap. In many emerging areas, there are no clearly identifiable winners. How much ­ do you know about the product roadmap of your existing providers? Are you actively scanning small and emergent players? No part of your portfolio should be off-limits— 4 Agile software, hardware, services, talent, data, methods, and tools. Do you have the skills and CIOs are adopting agile methods to expedite delivery times and improve business alignment. Organizations using agile the discipline to evaluate and predict how the have seen promising results: landscape will evolve—not only in the market but, more importantly, for your company, Improve Maintain Worsen for your customers, and for your business partners? Make sure you are getting what you need in order to provide what the business wants from IT. And be ready to reevaluate in light of market shifts, M&A events, or leadership transitions. 83% of businesses have future plans to implement agile, an increase from 59% last year.